Senate Stalls Out on Extenders, Moves to Small Business; Extensions Still In Limbo

After eight weeks of negotiation, the Senate was unable to collect the necessary 60 votes to clear the pared down Extenders Bill for a vote. After the Extenders third strikeout, Senate Majority Leader Reid (NV) pulled the bill from the floor. He indicated the Senate will move on to a small business credit and lending act before the Fourth of July Recess. The Extenders Bill is one we’ve all been following closely for its extension of the enhanced FMAP Medicaid rate in ARRA (which expires December 31, 2010), its Medicare preventive services clarification for health centers, and also for its extension of unemployment benefits, the National Flood Insurance Program, Build America Bonds and New Markets Tax Credits, among many other provisions.

The Future of Those Extensions (Especially FMAP)

The biggest challenge the Senate had in passing the large Extenders package was the unpaid-for portion of the bill, which originally added more than $100 billion to the deficit (in the final Baucus version down to $35 billion). This involved significant compromises in both chambers – with the House dropping the FMAP extension from their bill at the last minute because of its cost ($24 billion) and the Senate scaling the enhanced FMAP back in their last version to decrease over the six-month time period (which would have cost about $15 billion). While this wasn’t the only important provision in the Extenders Bill, it has received significant attention and support from across the country and here in Washington. Since the larger bill was pulled, several Senators including Senator Olympia Snowe (ME), one of the coveted Republican votes needed to pass the bill, have called on Leadership to pull out certain provisions from the bigger bill, find offsets for them so they’re paid for, and allow an individual vote on each one. This was the tack the Senate took with a six-month fix for the Medicare physician payment rate (called the “SGR Fix”), which the House passed at the end of last week and which has now gone to the President to sign. However, it is unclear at this point if there would be the votes for any of these provisions on a stand-alone basis.

There is no consensus at this point about what the Senate will do with the larger package or individual pieces of it. It’s very possible that until the bill is fully paid for, there may not be 60 votes to pass it, and it’s unclear whether leadership is willing to pull the FMAP extension out for individual consideration. For right now, the issue remains that while the enhanced FMAP Medicaid rate in ARRA does not expire until the end of this year, many state fiscal years will be starting at the end of this week, and without action from Congress, many states may decide to proceed with cuts to their state budgets. Here at NACHC, we will continue to keep a very close eye on where Congress is heading with the Extenders package and continue to work with our national partners to communicate the importance of the FMAP extension, so keep reading the blog for more updates.